One week after announcing plans for Chapter 11 bankruptcy, Montana’s largest independent retailer has filed the paperwork in federal court.
Vann’s is based out of Missoula, with retail stores in Kalispell, Billings, Bozeman and Hamilton, and a second Missoula store in Southgate Mall.
In the company’s filing, Vann’s lists assets of more than $17.6 million dollars and liabilities nearly $14.4 million. The company’s two largest creditors, First Interstate Bank and G.E. Capital hold most of the debt.
Vann’s Chief Executive Officer, Gerald McConnell claims the company was pressured by market forces not unlike other large retailers who were forced into reorganization by declining sales, shrinking profit margins and increasing costs. McConnell cited companies like Borders, The Sharper Image, Circuit City, Blockbuster, Linens N’Things and Gottschalks as examples.
Beyond recessionary pressures, Vann’s had other problems. The electronics and appliance retailer struggled with costly expansion expenses when it strayed from its core business.
In 2010, Vann’s opened a new venture with outdoor equipment and clothing lines. McDonnell says the internet endeavor diverted financial and staff resources at a critical time and failed to take advantage of the company’s experience and reputation.
Financial difficulties became critical when lender G.E. Capitol pulled its line of credit and called for accelerated payment on July 30th.
Vann’s employs 160 people in Montana. Court filings indicate the July payroll totaled about $480-thousand dollars.
Under Chapter 11 bankruptcy, Vann’s will continue to operate its retail stores as the court works with the company to restructure finances. In an earlier interview, McConnell told NBC Montana that he hopes to have the reorganization complete within six months.